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Oil billionaire's assets counted as separate property in divorce

In Arizona, when a married couple gets divorced, the money each spouse acquired during the marriage and the assets bought with that money fall into the category of community property. Such property can be divided between the spouses in a divorce settlement. Property that either spouse acquired before the marriage is known as separate property, which is generally not divisible in divorce.

With that said, let's consider the widely publicized divorce of billionaire Harold Hamm, founder of the oil company Continental Resources. There was speculation that the divorce settlement between Hamm and his wife Sue Ann might entitle her to a large share of the oil company's assets. Shareholders were reportedly concerned that Sue Ann's gaining more control in the business could result in a managerial shake-up.

However, as it turns out, the vast majority of Harold's shares in the business were acquired prior to the marriage, meaning those assets are separate property. A judge's ruling confirmed the separate-property status of the assets, and Harold will keep his controlling interest in the oil company.

Incidentally, other forms of separate property are gifts to only one spouse and property inherited by only one spouse. A problem that many people run into is that property that was initially separate gets commingled with community property. Arizona residents faced with this situation should speak with their attorneys about accurately valuing separate and community assets.

The Hamm divorce has not been finalized, and Sue Ann could still be entitled to a significant number of shares in Continental Resources. Four million of Harold's shares were reportedly not categorized as separate. The spouses' marital split is set for trial this coming summer.

Source: Forbes, "Billionaire Hamm To Retain Control Of Continental Resources In Divorce Settlement," Christopher Helman, March 4, 2014

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